Thanks to Amazon's explosive growth, selling products on the platform has become a popular way for people to make money from home. Not only can businesses sell and be profitable, but individual sellers can also leverage the huge user base of Amazon to sell products online. In this guide, you will learn the main things you need to know about how to sell on Amazon, including the different ways to sell, the steps to begin, what dropshipping is and other valuable tips to help you start making money through the world’s largest online retailer.
What does selling on Amazon entail?
Selling on Amazon involves more than just uploading your products to a website. There are other multiple steps and considerations you need to take into account if you want to sell online successfully. Below are the main steps for how to start a business on Amazon successfully.
Decide how you plan on selling
The first step is determining how you will get your product to your customers.
Fulfilled by Amazon
Fulfilled by Amazon (FBA) is a service that allows you to store your products in Amazon's warehouses and have them shipped by the company. This means that when a customer orders your product, Amazon will handle the packaging and shipping of the item.
The main benefit of being an Amazon FBA seller is that you don't have to worry about sending your packages directly to your customers. This task requires a lot of time you could spend growing your business. You can leverage Amazon's global infrastructure and personnel to get your products to people on time. Another benefit of FBA is that it can increase your Amazon sales in a few ways. Products that Amazon fulfills are eligible for services like free shipping, which can make them more appealing to customers.
Products shipped by seller
Another option for selling your products on Amazon is to handle the shipping and fulfillment yourself. This means you'll be responsible for packaging and shipping the items to customers when they order. This can be a much more time-consuming option, but it does give you more control over the process. If you decide to handle shipping yourself, it's essential to ensure that you have a reliable and efficient process for fulfilling orders. This might include investing in high-quality shipping and accounting software or hiring additional staff to help you out.
Perform market research
By conducting research, you can better understand the market and identify opportunities for your own business. This will help you make informed decisions about which products to sell and how to price them, which can ultimately help you increase your sales. Here are a few things you can do to determine what to sell on Amazon:
- Research trends: Keep an eye on the latest trends in an industry of interest through social media, which can give you an idea of what product categories are currently in demand and which are likely to become popular.
- Think of gaps in the market: You need to identify products that are not being offered but that you think could sell well. Think of problems you and the people you know constantly face and find products that solve those issues. These are generally the best things to sell on Amazon.
- Get customer feedback: Keep an eye on customer feedback for products similar to the ones you want to sell. This can give you insight into what people like or dislike about a product and help you identify improvement opportunities.
- Test the market: Once you've identified a new product opportunity, test the market by listing a small quantity of the product to gauge customer interest and demand. This should be the first thing you do once you open your Amazon store. You don't want to put all your eggs in one basket and commit a large amount of time and money to a product that ultimately won't sell much.
Choose a plan
There are two plans with different Amazon seller fees. Below are the main characteristics of both plans.
The individual plan is best for sellers who plan on selling a small number of items. It's a pay-as-you-go plan, which means that the Amazon selling fees you'll pay are for each item you sell. This plan is ideal for sellers just starting out who want to test selling with Amazon before committing to a larger plan. However, this plan comes with a higher per-item fee than the other plan. Additionally, you will not have access to advanced features such as free shipping promotions.
The professional plan is best for sellers who plan on selling a larger number of items. It has a monthly subscription fee, but the per-item fee is lower than with the individual plan. This plan is ideal for sellers ready to take their business to the next level and looking to increase their sales on Amazon. Additionally, the professional plan gives you access to more advanced features, such as offering special promotions, custom shipping fees and more.
Set up your store
The first step in starting your Amazon store is to create a seller account. The Amazon seller requirements are simple and include basic information such as your name, address and tax information. Amazon also requires additional documents to verify your identity and to facilitate transactions. Additionally, you will need to provide a phone number and email address for Amazon to contact you. You may want to look into how to get a free business phone number. You will need a bank account to receive your payments. If you're considering opening another account for your Amazon store, you can explore the best business checking accounts.
Once your account is set up, you can start listing your products. Make sure that your product listings are accurate and complete, including detailed product descriptions and high-quality images. The product descriptions should include information such as the features and benefits of the product, the materials used and the dimensions. High-quality images are crucial because they are the first thing customers will see when considering your products.
Invest in marketing
Marketing is essential for any business, and selling on Amazon is no exception. There are several ways to market your products on Amazon, including sponsored ads, promotions and influencer marketing. Sponsored ads are a great way to increase the visibility of your products on Amazon. These ads appear at the top of search results for specific keywords. Ads can be targeted to specific demographics, such as age, gender and location, which can help increase the chances of your products being seen by the right people. Plus, you can also run advertising campaigns on other platforms, such as Google or TikTok, to increase your exposure. Just make sure you link to your product listing on the ad.
Discounts are also a great way to market your products on Amazon. Customers are more likely to purchase products on sale, so offering discounts can help increase visibility and drive sales. Finally, influencers are another standard tool for businesses to showcase their product to a large number of people. If you find the right influencer and he or she loves your products, you’ll gain a competitive advantage. However, it is crucial to do substantial research to find an influencer with the right audience — people with the greatest potential to convert into new customers. Marketing usually requires a significant investment, so if you're considering getting a loan to fund your store, compare multiple small business loans that suit your needs.
Dropshipping can be a great option if you're not ready to invest in inventory. This is a method of fulfilling orders where you don't keep products in stock but instead transfer customer orders and shipment details to the manufacturer, who then ships the product directly to the customer. The main benefit of dropshipping is that it allows you to sell a wide range of products without investing in inventory upfront. You can just choose a product you like from a manufacturer, sign a dropshipping agreement and list your products on Amazon.
To start with dropshipping, you need to find a supplier offering dropshipping services to source products. A lot of people like to use Aliexpress to find suppliers of products. However, those manufacturers are usually based in China, meaning longer delivery times. Another option is to find local suppliers. Once you agree on terms with a supplier, list the products on your Amazon store. When someone makes an order, send the shipment details to the manufacturer, who will send the product directly to the customer's address. It's important to note that you will still be responsible for providing customer service and handling any issues that may arise, such as returns.
Gather good feedback and customer reviews
Feedback and customer reviews are crucial for any business, especially on Amazon. Positive Amazon reviews can help increase visibility and sales, while negative product reviews can hurt your business. Therefore, providing excellent customer service and promptly responding to any negative feedback is essential. When customers see that other people have had a positive experience with your products, they will more likely purchase from you. Positive reviews also help to increase your product's visibility on Amazon's search results.
In addition, when people see that a product has no reviews, they may be less likely to trust your store. This happens because sellers with no reviews could be scamming people. So getting the first reviews is critical for your early stages. You can send follow-up emails to encourage customers to leave reviews after their purchase. These emails should thank the customer for their purchase and ask them to leave a review of your product. You can also provide incentives like discounts on future orders for customers who leave a review.
In this section of the guide, you can find the answers to some of the most common questions about selling on Amazon.
Amazon selling FAQ
What are the benefits of selling on Amazon?
The biggest benefit of selling on Amazon rather than on your website is the platform's vast user base. With over 310 million active customer accounts, Amazon offers sellers access to a very diverse universe of customers. By selling on Amazon, you can reach millions of customers and sell more products than you would by listing them on a smaller platform or through your website. You don't have to work as hard to gather an audience.
Another benefit of selling on Amazon is the level of trust that customers have in the platform. Amazon is the world's most well-known and reputable e-commerce site, and customers feel safe and secure making purchases through the company. In addition, Amazon offers a variety of tools and resources to help sellers succeed. For example, Amazon provides analytics and data on customer behavior and product performance, which can help you optimize your listings and boost sales.
Amazon also offers a number of marketing and advertising tools, such as sponsored ads, that can help you instantly increase your products' visibility. Another benefit of selling on Amazon is that you can leverage the company's fulfillment network to handle your shipping. This can save you the time and money you would spend building your own shipping system.
How much can you make selling on Amazon?
The answer to this question depends on the products you sell, your profit margin and the popularity of your listings. For example, a high-profit margin on a low-ticket product needs many sales to give you a profit of $1,000. On the other hand, just one sale of a high-ticket product with a low-profit margin is more likely to provide you with a profit of $1,000 or more. However, high-ticket products are more difficult to sell since the price is elevated. On average, according to ZipRecruiter, Amazon sellers make around $40,000 a year.
Once you find successful products, there is no limit to how much money you can make. However, without the proper listing optimization and marketing, it's possible to not get any sales in months.
Start your Amazon e-commerce account
Selling on Amazon is a huge opportunity for individuals and entrepreneurs learning how to make money from home. You can start with a low investment, and if you follow the right strategy, it's possible to build a profitable business. Choose the right plan for sellers and whether or not you want Amazon to fulfill the product or if you'll handle it. By doing your market research and understanding the demand for your product, you can set yourself up for success.